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Short Term Sources of Finance

Telangana Open School (TOSS) · Class 12 · Business Studies

Complete topic list for Short Term Sources of Finance in Telangana Open School (TOSS) Class 12 Business Studies. Key concepts, sub-topics, and what to focus on for board exams.

41 questions25 flashcards5 concepts

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4 Topics · Telangana Open School (TOSS) Class 12 Business Studies

Topics in Short Term Sources of Finance

1

Financial Needs of Business

  • Businesses require finance for both fixed and working capital.
  • Fixed capital is used to purchase long-term assets like land, buildings, and machinery.
  • Working capital is the difference between current assets and current liabilities and is essential for daily operations.
2

Types of Business Finance

  • Business finance is classified into short-term, medium-term, and long-term based on the duration of fund requirement.
  • Short-term finance is needed for less than one year and is used for working capital.
  • Medium-term finance spans 1–5 years and includes bank loans and public deposits.
3

Sources of Short-Term Finance

  • Trade credit allows businesses to buy goods on credit from suppliers, usually for 30–90 days.
  • Bank credit includes loans, cash credit, overdraft, and bill discounting.
  • Factoring involves selling accounts receivable to a third party (factor) for immediate cash.
4

Merits and Demerits of Short-Term Finance

  • Short-term finance is economical and flexible, with no interference in management.
  • It can sometimes serve long-term needs through renewal.
  • Demerits include fixed interest burden, asset charges, and uncertainty during crises.

Key Concepts

Central concept: Short Term Sources of Finance

Working CapitalTrade CreditBank CreditFactoringAdvance from CustomersInstalment CreditMerits of Short-Term FinanceDemerits of Short-Term Finance

Frequently Asked Questions

What are the important topics in Short Term Sources of Finance for Telangana Open School (TOSS) Class 12 Business Studies?
Short Term Sources of Finance covers several key topics that are frequently asked in Telangana Open School (TOSS) Class 12 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Short Term Sources of Finance — Telangana Open School (TOSS) Class 12 Business Studies?
Understand the core concepts first, then work through the 41 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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